The 43 building projects under way in Tempe outnumber the city’s 40 square miles.
It’s a building boom coming primarily in the shape of condominiums, but places to employ, entertain and feed all the expected new residents are coming, too.
"There are a huge, huge number out there of people who want to live downtown Tempe, who don’t have any really nice options," said Tom Tokoph, a broker who operates out of arguably Tempe’s first upscale loft, Orchidhouse. "There’s so few units, combined with the fact that people aren’t willing to leave because, where are they going to that’s as cool as this? There’s no doubt this area is hot."
The Valley’s overall condo market, however, is cooling.
Valley-wide, developers may be overly optimistic about how many people want to live in new high-rise and loft condos. More than 8,000 condo units are planned or under construction. Market watchers say less than a quarter of all the planned projects will actually go up and sell out anytime soon.
Like home prices, prices for new condos are starting to flatten or even dip in some areas of the Valley. Yet Tempe’s condo market seems to be trying to buck the trend. The area expected to fare slightly better than other areas, including midtown Phoenix, because it has the student population and other amenities like retail and entertainment to draw buyers.
"It’s our lack of supply that creates the demand that other areas don’t have," Tokoph said. "You can argue five years from now, when all these buildings are in, there will be a glut."
Reaching for sky
Developers filed paperwork last week with the city for yet another high-rise condo complex for downtown Tempe. It marks the fourth project intended to reach higher than 18 stories.
The series of high-rises sprouting within Tempe’s core, plus the dozens of other towers being built around Tempe Town Lake and the downtown, point to a concentrated condo craze.
Constellation Property Group is an Australian-based company that submitted building proposals for 322 E. Sixth St. Right now, the lot contains only a single-story tan warehouse-style building known as the Armory.
Plans show Constellation intends to build 17- and 20-story condo towers at College Avenue and Veterans Way. The 364-unit complex would be at the foot of Tempe Butte and be nearly as high as nearby Sun Devil Stadium.
The project likely would include commercial and retail space, plus four floors of underground parking with room for 750 vehicles, according to the proposals. Each building would get its own amenities such as swimming pools, saunas and cabanas.
"We see there are design-led people who appreciate good architecture there," said Lana Wood, a spokeswoman for Constellation. "What we’re bringing will be unlike anything else in the area."
While the project may be unlike anything now in the city, there are no fewer than eight large-scale condo complexes in the works in Tempe’s core. And there are dozens of others, one as large as 742 units, popping up around the outskirts of downtown and on the shores of Tempe Town Lake.
Urban experience
Many of the planned complexes in Tempe are going after the same crowd: those seeking urban surroundings. And most all the sites are within walking distance from light-rail stations, Mill Avenue and Tempe Town Lake.
Some question whether the market can really sustain all this new growth. Those doubts have growing validity as new condo complexes such as the Vale on University Drive have units still empty.
At the same time, building heights concern many others.
"On the one hand, I have always felt that for our downtown businesses to be successful as they need to be, . . . residential is a key component," Councilwoman Pam Goronkin said.
"On the other hand, height is a concern. It has been for a long time for a number of reasons, not the least of which are sightlines to the amenities which we have like ‘A’ Mountain (Tempe Butte), in addition to the fact we have to balance our height so it is not all focused in one place."
The Constellation group, though, said its project will stand out.
"We want something lush and green," Wood said. "That acts as a juxtaposition with the nearby rock formation."
The project’s backers include veterans in urban development. The College Avenue Advisors business partnership originally purchased the site. That group includes lawyer Grady Gammage Jr.
College Avenue Advisors in turn paired with Constellation, which is affiliated with Australian architect Eugene Marchese. Both Constellation and Marchese are behind dozens of condensed living projects in Sydney and Melbourne, Australia, and in Las Vegas, San Diego and Austin, Texas.
Marchese and Constellation also have expressed interest in redeveloping Tempe’s historical Hayden Flour Mill.
Stores to follow crowd
Support services for all the planned residents are being built, too. Construction on the Tempe Marketplace shopping center at the intersection of Loops 202 and 101 is under way, and retailers are coming to south Tempe, spurred by the popularity of Ikea.
Even hotels are coming at a rapid rate: several existing businesses, such as Tempe Mission Palms and the Fiesta Inn Resort, have plans to expand, and two hotels are proposed for Tempe Town Lake’s shores.
Suncor Development Co. plans to add a 14-story hotel-condo project with 183 guest rooms, 40 condos and a restaurant to the cluster of blue buildings the developer is already erecting next to the lake.
While the developer has worked hard to keep the details under wraps, a few tidbits about Suncor’s hotel project emerged when the Redevelopment Review Commission held a brief public hearing on the proposed project last week.
The hotel would sit just south of Suncor’s recently completed Edgewater condo tower, according to the plan. And it is expected to be 167 feet tall, with basement parking, ground-floor lobby and restaurant and hotel guest rooms on eight floors and condominiums on five floors.
Suncor has been reluctant to say much about the project because many would-be developers make announcements that never come to fruition, said Randy Levin, vice president of design and urban infill development at Suncor.
If the hotel project takes off, it would become part of a flurry of construction at the 17-acre Hayden Ferry Lakeside complex near Mill Avenue and Rio Salado Parkway. Construction crews are building a 12-story office tower, a parking garage for 2,460 cars and a 12-story condo tower called Bridgeview.
Katie Nelson and Jahna Berry
The Arizona Republic
